One of the frustrating aspects of talking about housing and trying to do something about it, is the lack of good self reported data about how renters feel about their life as renters. Too often the data pours out about how how much people who rent spend per month as a percentage of gross income. I’ve long said this is terrible way to measure affordability. First, it assumes that the housing “crisis” would be over if everyone sorted perfectly into units priced at exactly 30 percent of their gross monthly income. Second, it assumes that someone paying more than 30 percent has a problem and therefore is part of the “crisis.” Everyone, practically, knows that markets don’t work that way. People pay more when they want something enough and think it’s worth it. A recent survey by Freddie Mac sheds some light on this.

The Federal Home Loan Mortgage Corporation (FHLMC) is commonly known as Freddie Mac is a government backed corporation that deals in repackaged home loans, called the secondary market. Loans originate between a lender and a buyer, and later the lender can sell that loan on the secondary market. I won’t go into all that here, but to read more you can check out this brief history of Freddie Mac. Freddie Mac is all about housing and housing data, and they pay attention to trends in the market including from the customer perspective. Every quarter they conduct a renter survey based on what renters actually say rather than what other say about data about renters.

One impressive thing is the fact that renters like living in the city and will trade space for location.

This is what has been well documented and reported by many including locally by Mike Scott: unit sizes are falling. Apartments are getting smaller.

And along with getting more comfortable with idea of renting rather than owning, renters are also not necessarily going anywhere if rents go up.

We don’t want rents to go up. That would be bad. But when renters speak for themselves, they say that rent going up doesn’t mean they are going to be “displaced” and move away. Instead, they’ll make different choices. The survey found that renters will prioritize their spending differently, spending less on “non-essentials.” And here’s what the survey found about income to housing cost ratio.

What matters here is the age of the renter. Younger people pay a bigger percentage because, generally, they earn less. This is just common sense. A recent graduate from college might not be so worried about paying a larger portion of her wages on rent because she has few other expenses. This matters, and simply taking household data and pointing to the ratio of income to rent doesn’t tell the whole story.

The long and short of it is that we need to produce more housing to keep rents from climbing so fast that renters do suffer. A non-essential item shouldn’t be health and dental care. Renters shouldn’t have to sacrifice other important things like setting aside money for the future or education to pay rent. The best way to avoid that is to build lots of housing of all types everywhere so renters have options. The good and bad news is that renters are persistent; they want to live in the city even if it means paying more and living in smaller spaces. That’s good news because it means people aren’t “fleeing the city” because of prices. It’s bad news because it is showing the tolerance for higher prices among renters. That means the demand for housing will keep climbing even in the face of unhelpful schemes like Mandatory Inclusionary Zoning (MIZ).